NFT founder accused of stealing millions from Bitcoin project

Jonathan Mills, the founder and CEO of the NFT project Hashling NFT and the Bitcoin mining venture Satoshi Labs (formerly Proof of Work Labs), is facing serious allegations from former business partners who claim he misappropriated millions of dollars in project funds. A lawsuit filed in Illinois on May 14 accuses Mills of fraud and breach of fiduciary duty, alleging that he failed to honor equity returns promised to investors.

The plaintiffs assert that Mills misled them about transferring assets from Hashling NFT and at least $3 million from the Bitcoin mining operation to Satoshi Labs, a holding company he controls. They also contend that they collectively raised $1.46 million through two NFT drops on the Solana and Bitcoin blockchains but received no returns on their investments. Subsequently, Mills allegedly ceased communication with them and created a flawed shareholder agreement to falsely support his claim that the holding company controlled the project’s assets.

Source: Pacer

The lawsuit further claims that Mills held a 67% equity share in Satoshi Labs, while several other investors contributed up to $20,000 each for just 2% equity, and that he maintained a 67% voting stake on all matters related to the company. Despite these arrangements, the plaintiffs assert that Mills assured them their equity stakes would remain unchanged despite the company’s name change.

The Hashling NFT project originated from an idea Mills discussed with one of the plaintiffs, Dustin Steerman, who had previously collaborated with him. Despite Mills’ original claim that he had no money or NFT-related knowledge to contribute, the project continued forward, with Mills and Steerman enlisting other investors to assist with different areas such as NFT art, social media marketing, and attending NFT conferences. Mills also included his girlfriend in the scheme, according to the plaintiffs.

In addition to the fraud and breach of fiduciary duty claims, the plaintiffs are seeking a constructive trust over the project’s assets and full legal restitution.